Business
STA, 3 October 2019 - Local and global companies are becoming increasingly intertwined and interdependent, which brings many benefits to both, heard a debate on day two of the Slovenia Business Bridge investment and development conference, hosted by AmCham Slovenia to mark its 20th anniversary.
Collaboration with local companies enables multinationals to better identify the wishes and needs of their clients, agreed the participants of Why Are Multinationals also Local Companies? discussion.
Biljana Weber from Microsoft said that smallness could bring flexibility, responsiveness and agility.
"If you come from a small country, you're more open to learn new things and you find it easier to create a social network," she said, adding that ever more large companies would like to present themselves as local businesses.
Gregor Pilgram from Generali CEE Holding said the insurance industry was a sector which could not do without integrating the multinational and local sectors.
"Regardless of an insurance company being part of global networks, insurance business is always a local business," he stressed.
The key to every business is understanding clients. "And who would understand them better than somebody who lives with them," said Pilgram.
Similarly, John Denhof, chairman of the NKBM bank board, said a way to success was a good team.
"We took an important step towards being more successful by giving more focus on understanding the needs of clients in drawing up our business strategy.
"Of course, it was crucial to find the right staff who knew how to get immersed into the needs and expectations of clients and adjust our services to them," he said.
The debate also revolved around small companies having trouble arousing the interest of large companies.
Weber said part of the problem was how to present a good solution to an investor in a simple manner so that everybody would understand it.
Panagiotis Alekos, director general of Bayer Slovenija, said small companies could be interesting to large ones for their talents.
Another focus of the debate was the need not to be afraid of mistakes, but to take take them as part of a way to find a solution.
"The problem is not the lack of innovation but the fear of mistakes. Mistakes used to be a taboo, but today we must understand them as part of the way to success," said Alekos.
Denhof added that it sometimes took testing ten ideas before finding the right one. "There's nothing wrong with this. We should not be afraid of failure," he said.
All our stories on AmCham Slovenia are here
STA, 3 October 2019 - The government has endorsed changes to the aviation act that create a legal basis for the state to subsidise crucial air links with the country following the collapse of flag carrier Adria Airways, if this proves necessary.
In line with the proposed changes, the state could subsidise flight connections with Ljubljana if other airlines did not set up commercial flights.
The changes had been drawn up by the Infrastructure Ministry as Adria was heading for receivership.
This is one of the two possible steps the state can take in the aftermath of Adria's collapse. The other is to found a new air carrier.
Finance Minister Andrej Bertoncelj said after Thursday's session that Slovenian Sovereign Holding and the Bank Asset Management Company had been tasked with calculating the potential costs of each solution.
The option of setting up a new company was not discussed by the cabinet today.
In line with the proposed changes, subsidies would be possible for connections that are of vital importance for the country in terms of economic and social development. State intervention in such cases is also allowed under the EU legislation.
But Betroncelj added the legislative proposal was yet to be coordinated with the European Commission. A decree will need to be passed and a call for applications published to create equal opportunities for all, he noted.
The Infrastructure Ministry would be able to launch a procedure to set up an "obligatory public service" if no air carrier with a licence of an EU member state offered connections that are important for Slovenia for economic reasons.
The necessary funds would be provided by the government. The ministry could not provide an estimation of potential costs of this service yet. "We have no way of knowing which routes will not be covered by the market itself," Infrastructure Minister Alenka Bratušek told the press.
She would like the legislative motion to be pushed through parliament, so that the state can act if necessary. Bratušek said she had also proposed to coalition partners to consider supporting connections with Maribor, Slovenia's second largest city.
For now it seems that the Ljubljana airport operator, Fraport Slovenija, will manage to restore some of the crucial connections with Ljubljana.
The German Lufthansa and its subsidiary Swiss International Airlines, both of which are members of the Star Alliance, will be offering flights connecting Ljubljana to Frankfurt, Munich and Zurich, in the winter season.
The Belgian air carrier Brussels Airlines, also part of Lufthansa Group, is introducing six Brussels-Ljubljana flights a week.
Bratušek welcomed these solutions, saying she would be particularly pleased if the ticket prices will indeed be lower than Adria's.
Receivership proceedings for Adria Airways was officially launched yesterday, with unofficial information indicating the company's debt amounts to EUR 90 million.
Adria has not published its 2018 business report yet, but a document obtained by the newspaper Finance suggests that at the end of last year its long- and short-term liabilities reached EUR 21.5 million and EUR 54.6 million, respectively.
In the nine months of this year, the liabilities allegedly rose by another EUR 20 million to EUR 90 million.
Receiver Janez Pustatičnik said today that contracts for Adria's hired planes had already been cancelled. "If any real opportunity arose for continuing any potentially profitable segment, so that this would increase bankruptcy estate, we will look into it and act in line with the law."
He expects the situation to be assessed in the coming weeks. The amount of claims, which creditors can file within the next three months, will be revealed in the opening report, he said.
All our stories on Adria are here
STA, 3 October 2019 - The government confirmed on Thursday a package of tax tweaks that are meant to reduce taxes on labour to increase competitiveness. The list includes increased general tax credit and changes to the income tax brackets to reduce the tax burden on the middle class. On the other hand, the taxation of capital gains and rental income is to rise slightly.
The changes, which the government wants passed in fast-track procedure so they can enter into force with the start of 2020, affect laws on personal income tax, corporate income tax and on tax on profit from disposal of derivatives.
Speaking of a "new step towards tax optimisation", the government said that the "proposed measure will additionally reduce the burdens on labour, whereby we are strengthening competitiveness, preserving a stable economy and contributing to sustainable economic growth".
In general, the changes are designed to increase take-home pay, which will be achieved with a higher general tax credit that all taxpayers are entitled to, by EUR 200 to EUR 3,500.
In an effort to reduce the tax burden on the middle class, the tax rate will fall by one percentage point both in the second and third brackets, to 26% and 33%, respectively.
STA, 3 October 2019 - The new custom duties the US is set to impose on products from the EU on 18 October will not affect Slovenia, neither directly nor indirectly, according to the analytical department of the Chamber of Commerce and Industry (GZS).
What is more, because some of the duties will apply only to some member states, cheese, olives and pork from Slovenia might become more attractive for the US, the GZS said in a commentary on Thursday. Duties on these products will be imposed for Germany, Spain and the UK.
The GZS said the move was expected but added it was surprised by the swiftness with which the duties were being introduced.
In total, the products subjected to the increase in customs are valued at EUR 7.5 billion. The move was expected after the World Trade Organisation (WTO) found that Airbus received unjustified state subsidies.
Europe is likely to impose counter-measures and the WTO is likely to find that Boeing, as well, received unjustified subsidies from the US.
STA, 2 October 2019 - The outright stake in the operator of the Izola Marina (Marina v Izoli) has been put on sale, with the official receiver of its owner setting the asking price at EUR 5.96 million and accepting bids until 4 December.
The announcement by Maura Chiarot, the receiver in the company Universe Service, which controls Marina Izola through the subsidiaries Porting and Marinves, was publishes on Wednesday in the newspapers Finance and Primorske Novice.
Bids will be accepted until 4 December, and the potential selection of the best bidder will take place on the following day in Italy's Pordenone, where the receivership proceedings for Universe Service are being conducted.
The Izola Marina, which has a total of 700 berths and is mostly used by sailors paying the annual fee, has been on sale for some time.
Primorske Novice recently reported that the interested buyers include the Polič family from nearby Lucija and Ante Guberac, the chairman of the Koper-based construction company Grafist.
Either way, in addition to the asking price, the buyer will also need to pay an approximate amount to the Italian bank Intesa Sanpaolo to pay back a loan dating back from the construction of the marina and other liabilities.
The marina's website is here
STA, 2 October 2019 - The Constitutional Court has ruled in a close vote that the retirement and disability pension act is not unconstitutional in the part that prevents sole proprietors from receiving full pension if they decide to continue working after reaching retirement age.
The top court, which received the review request from the Ljubljana Labour and Social Court, said on Wednesday that intergenerational fairness, equality and financial sustainability took precedence over the interests of sole proprietors.
It ruled that the constitutional right to pension does not ensure that individuals receive old-age pension when they do not give up working. The Constitution guarantees the right to a pension to individuals who have paid their contributions if they also meet all other reasonable conditions.
It is reasonable to make full pension conditional on giving up work, considering the benefits pursued, said the court, which decided in a 4 to 5 vote that the act was not in violation of the constitutional right to social security. Two judges also submitted dissenting opinions.
Meanwhile, the court was unanimous in its decision that the act was not in contradiction of the constitutional principle of equality, comparing other groups who may also continue working after reaching retirement age.
It also said that the act followed the principle of protection of legitimate expectations and was not in conflict with the right to free economic incentive.
The court also said that there are a number of reasons why sole proprietors decide to either continue work or retire, adding that it was not the legislature's intention to encourage sole proprietors to stop working and also could not have foreseen such decisions being made.
Sole proprietors, who continue working have to give up up to 80% of their pension. Meanwhile, legislative changes are in the pipelines that would decrease this figure to 50%.
The Chamber of Crafts and Small Business (OZS) responded by stressing the decision had been made in a close vote and that dissenting opinions showed that the existing rules were neither appropriate nor just.
The OZS has been striving for Slovenia to introduce double status of pensioners who want to continue working, a solution that would enable them to receive full pension.
The chamber agrees with judge Etelka Korpič Horvat, who said in her dissenting opinion that double status would be beneficial for everybody. Retired proprietors would be able to continue working and would also contribute to the pension and health insurance purses.
"It is also far from insignificant that double status eliminates the poverty of those with low pensions. Double status strengthens the value of labour without preventing the young generations from working," the OZS quotes Korpič-Horvat's opinion.
The chamber also expressed the belief that the decision and the dissenting opinions would convey to the National Assembly that it could introduce a double system that would be much fairer and more reasonable than the existing provisions.
STA, 2 October 2019 - The Kranj District Court launched today receivership proceedings for Adria Ariways, after the German-owned air carrier filed for receivership on Monday.
The procedure, in which creditors will have three months to file their claims, will be managed by receiver Janez Pustatičnik.
Passengers who had bought tickets for Adria's flights which were subsequently cancelled have been urged to report their claims as well.
Those who bought the tickets with their bank card can ask their banks for a refund, the Market Inspectorate said today. If their motion is denied, they can turn to the Slovenian Bank Association.
The Slovenian flag carrier, which was sold to the German turnaround fund 4K Invest in 2016, said on Monday that the proposal had been filed due to insolvency and in line with legal provisions applying in such a situation.
Adria had been struggling with financial difficulties for some time, with the problems deepening further after the sale, even though the new owner announced growth, several capital increases and a new strategic partner.
Adria ended up selling all of its planes, while several of those rented were confiscated in recent years by leasing companies due to unpaid debts. The company, which employs 558 people, also owes part of the August wages and has reportedly failed to pay the social contributions for September.
After the management filed for receivership on Monday, the Civil Aviation Agency also automatically revoked the air carrier's operating license.
Other airlines are already moving to fill the void created by Adria's collapse. The German Lufthansa and its subsidiary Swiss International Airlines, both of which are members of the Star Alliance, will be offering flights connecting Ljubljana to Frankfurt, Munich and Zurich, in the winter season.
Next to the links with Brussels and Vienna, these connections are considered crucial for Slovenia's connectivity with the world.
The Belgian air carrier Brussels Airlines, also part of Lufthansa Group, is introducing six Brussels-Ljubljana flights a week. Tickets are available for sale as of today, while the first flights are scheduled for 4 November.
Several other companies already flying to Ljubljana are also increasing the number of flights to the Slovenian capital and using bigger planes for the route to adjust to the larger number of passengers.
Receivership proceedings were also launched today at the Kranj District Court for Adria's subsidiary Adria Airways Letalska Šola, which used to train Adria's pilots. Blaž Poljanšek was appointed receiver.
Adria's school for pilots was set up in 1980 in cooperation with the Ljubljana Faculty of Mechanical Engineering. Initially, it was to train only future Adria pilots, but later offered training for pilots of private sports planes as well as professional pilots of the highest ranks. It has trained more than 2,800 pilots.
Its last year's revenue topped EUR 300,000, while net lost almost reached EUR 340,000. The company also had more than EUR 840,000 in short-term liabilities.
All our stories about Adria are here
STA, 1 October 2019 - Wine growers in Brda, one of the most famous wine growing districts in Slovenia, are satisfied with this year's grape harvest despite the overall numbers being lower than expected - the wine is expected to be of excellent quality.
Representatives of the wine cellar Klet Brda, the largest wine producer in the western region, told the press on Tuesday that the company and its partners produce a total of 6,300 tonnes of grapes this year.
This is 15% below the average expected annual yield, but the quality of wine is expected to be excellent by all parameters, the company's chief enologist Darinko Ribolica said.
Vineyard owners in Brda are satisfied the most with rebula, whose quantity was also the largest, followed by merlot. They are satisfied with all red grape varieties, with the sunny and warm September making for excellent quality.
This year's prices will be similar to last year's, but will be higher in the highest quality class. The prices will range from EUR 0.40 to EUR 1.20, compared to last year's average price of EUR 0.64 per kilogram.
The special guest for this year's grape picking session for the press was former Formula 1 pilot Ralf Schumacher, who owns a Mediterranean cuisine restaurant near Germany's Cologne.
Klet Brda director Silvan Peršolja added that, while its wine was consumed on all continents, the company was not planning to enter new markets, but strengthen its brand on the existing ones, from the US and UK to China.
STA, 1 October 2019 - Krka, the Novo Mesto-seated pharmaceuticals group, has launched a new research and development centre to nearly double its R&D, and control and analysis capacities.
"With the new facility, which has state-of-the-art equipment for laboratories, analysis and technology, we've almost doubled Krka's development as well as control and analysis capacities, thus significantly improving R&D, which is at the core of Krka's vertically integrated business model," said Aleš Rotar, R&D director.
The Research and Control Centre 4 (RKC 4) is a EUR 55.6 million investment located on the outskirts of Novo Mesto, and is connected with a bridge to RKC 3 and then on to RKC 1.
The eight-storey building with 18,000 square metres of offices accommodates new control and analysis labs and R&D areas, CEO Jože Colarič said before Tuesday's inauguration.
Rotar stressed the centre was especially important for pilot development of solid pharmaceuticals as a key component in the development of new products.
The company believes RKC 4 will enable it to carry out advanced R&D tests at the very early laboratory stage and define the key features of a product in early stages.
At today's inauguration ceremony, Prime Minister Marjan Šarec labelled Krka as one of Slovenia's flagship companies, praising the company for its exports trends, development strategies, independence and its role in the local community.
He considers the investment an important milestone and an opportunity for development.
In the first half of 2019, the group posted a net profit of EUR 139.9 million, up 37% from the same period in 2018, on EUR 761.8 million sales revenue, up 12%.
The plan for this year is to finish with EUR 1.38 billion in sales revenue and EUR 172 million in net profit.
The group allocates 10% of its revenue for R&D and new technologies, and has more than 170 development projects for new products are under way.
It generates 29% of its sales with the new medicines which they have started selling over the past five years.
STA, 30 September 2019 - A piece of land east of Ljubljana's central station, which has been lying abandoned for years, is set to get a mixed residential and commercial building within two years, shows a recent release by the Environment Agency. The Masarykova project, planned by developer K. Tivoli, is expected to include 81 flats, a ground floor store and a car park.
The agency announced last week that K. Tivoli, which also built the Belle vie Tivoli housing complex near Ljubljana's Tivoli park a while ago, does not need to conduct an environmental impact assessment and obtain an environmental permit for the project.
Aside from providing housing for up to 300 people, the project involves an underground garage with 90 parking spaces and an extended ground floor, which is expected to be used by German retailer Lidl and three smaller bars. The total surface area is estimated at 16,910 square metres, 12,327 of which above ground.
The property on Masarykova street was owned by the municipal housing fund until last year. The newspaper Dnevnik reported it was sold for EUR 2.5 million to Iskra Impuls. Together with household appliance maker Gorenje, the Kranj-based engineering company owns Gorenje Project, one of two partners in K. Tivoli, the other being builder Kolektor Koling.
STA, 1 October 2019 - Lek, the Slovenian subsidiary of Swiss multinational Novartis, has announced phasing out the production of antibiotics in Slovenia's Prevalje in two years' time and moving it to neighbouring Austria. In the meantime, Prevalje will become one of the two locations of Novartis's emerging global centre for technical operations.
The news comes a month after the company said it would not expand production in the northern town of Prevalje despite having just built a new facility there.
Along with Hyderabad in India, Prevalje will become one of the two locations of Novartis's new global centre which will support the multinational's entire production network, Lek's new director general Robert Ljoljo said on Tuesday.
"The centre will be a hub for logistics, the supply chain, purchases, quality control, production science and technology, and engineering," he told the press after today's meeting with employees.
The new centre in Slovenia will employ "several hundred people", mostly experts in logistics, quality control and production science and technology, he explained.
He said that by assuming an additional role within Novartis, Lek was consolidating its presence in Slovenia and "pledges to remain in Koroška".
All Prevalje workers will be given a chance to retrain for new jobs, explained Roman Burja, director of Antiinfektivi Prevalje, the name of Lek's Prevalje company.
As production is being phased out in the coming two years, new jobs will be created gradually and the production will be gradually moved to Austria's Kundl, he added.
Lek has 250 employees and another 70 agency workers at Antiinfektivi Prevalje.
Production has already been suspended and the employees are on a paid leave, coming to meetings with their bosses to discuss the company's future plans for Prevalje.
Lek managers also met the local authorities, with Prevalje Mayor Matic Tasič hoping "they realise in Ljubljana that Prevalje could well be the seat of the new centre".
Ljolja meanwhile also said that TAB Mežica, a local maker of starter batteries for cars and industrial batteries, was interested in buying the recently-built Lek production facility.
A letter of intent has already been signed, he said, but would not disclose any other details.
Lek also expects some of its Antiinfektivi Prevalje employees to get jobs at TAB, which is planning to branch out into production of lithium-ion batteries.
